Vodafone bins pager biz after UK competition watchdog threatens probe

Vodafone UK has abandoned its plan to offload its pagers unit to Capita—in a monopolistic deal that would have made the professional services company the only supplier of paging services in the country.

On Wednesday, Vodafone confirmed to Ars that it would not be pursing the deal, after the Competitions and Markets Authority (CMA) threatened to carry out an "in-depth investigation" into the proposed merger, warning that a thorough investigation would get underway if Vodafone and Capita failed to "offer acceptable undertakings" to address its concerns.

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A Vodafone spokesperson told Ars that the mobile operator was "disappointed" with the regulator's "surprising decision," adding "this market has been contracting for some time and no other country in Europe has more than one wide area paging network."

But the carrier—which has set aside £2 million to plaster over the cracks of its botched IT billing system and poor customer service record by hiring thousands of call centre staff in the UK, following a record multi-million pound fine from Ofcom—doesn't want to splash cash on what it said would be a "prolonged investigation" into its pagers unit.

"Vodafone will not pursue the transaction and has made the decision to close down this business, which is based on ageing, standalone technology no longer supported by network vendors," the spokesperson said. "We will do our utmost to minimise the impact on the 1,000 or so customers still using the service."

In the age of the smartphone, pagers might seem outdated to some, but the device's simplicity, network reliability, and battery life mean they remain popular among medics.

As it stands, Capita and Vodafone both provide wide-area paging services to 999 responders and hospitals. In February, Vodafone confirmed it was selling its pagers business to Capita, which had planned to fold the unit into its PageOne divsion.

Vodafone's decision to exit the market means that there will no longer be a UK telco running a paging network. It also means that Capita will now have a monopoly in Britain—the very thing that the CMA was hoping to avoid.

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Earlier on Thursday, the CMA said it wasn't satisfied with the terms of the deal between Vodafone and Capita, saying "it could lead to a substantial lessening of competition as the two companies are the only suppliers of wide-area paging services in the UK."

The watchdog found that—after the merger—customers would have faced "price rises and reduced quality of coverage."

Capita, which had been given one week to table satisfactory proposals to "resolve the competition concerns," hadn't got back to Ars with comment at time of publication.

Hungry like the wolf?

Separately, the CMA warned Just Eat that its planned buyout of rival Hungryhouse could be bad news for competition for the UK's online takeaway ordering services.

It has similarly given Just Eat seven days to offer proposals to "sufficiently address the CMA's competition concerns."

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Deliveroo, UberEats, and Amazon Restaurants haven't chipped away at Just Eat and Hungryhouse's dominance in the UK market, according to the regulator. It said they "represent less direct competition" because they target dine-in restaurants that don't have their own delivery services.

"These recent entrants also offer less extensive geographic coverage than Just Eat and Hungryhouse," the CMA added.